TOGETHER WITH :
Howdy Fam!
Shout out to the marketing, strategy, and branding folks.
CarMax just opened a new frontier for car shopper connections on ChatGPT by releasing an app that lets customers look up and ask super-precise questions about inventory.
Our Head of Production, Nathan Southwick, actually gave it a try and told Paul and Kyle about it on yesterday’s State of the Union.
Keep Pushing Back,
—Paul, Kyle, Chris & Kristi
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Iran Conflict and the Auto Industry: What Dealers Should Tell Customers and Watch Right Now
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What’s happening and why it matters to dealerships
U.S. and Israeli strikes on Iran have disrupted shipping through the Strait of Hormuz, a major corridor for global oil and energy-related materials. Oil prices jumped quickly, and analysts warned crude could move toward $100 a barrel if the conflict continues. AAA also reported the U.S. average gas price rising to about $3.11 per gallon in early March.
Fuel prices change buyer questions first
For dealers, the first impact shows up at the pump. Customers feel gas prices immediately, and that shifts what they ask in the showroom. Expect more questions about MPG, hybrids, and whether it is smart to buy now.
Paul and Kyle talked on the Automotive State of the Union yesterday about how even small increases can push shoppers toward hybrids, plug-in hybrids, smaller fuel-efficient crossovers, value-focused used vehicles, and EVs when positioned around cost to drive.
Shipping reroutes create ETA and cost variability
The second impact is shipping variability. Some shipping companies have paused or rerouted vessels, and detours can add roughly 10 to 14 days to transit times. That does not automatically mean shutdowns, but it can mean less predictable ETAs, higher freight costs, war-risk insurance surcharges, and stress on just-in-time systems. The biggest risk is not always total volume. It is timing and trim mix, especially for brands and models already running low on day supply.
Energy and materials can quietly raise OEM pressure
A third, quieter pressure point is materials and energy. Plastics, synthetic rubber, aluminum, and steel all tie back to energy markets. If energy costs rise, manufacturing costs rise too, and OEMs often respond by tightening incentives and protecting margin.
What to say to customers right now
Customers want certainty, not forecasts. Win this moment by quantifying running costs, setting realistic timing expectations, and offering options without pressure. Fuel-efficient used inventory and well-merchandised EVs can become a real advantage if prices keep climbing.
We build a list of points to cover with customers and a prompt for keeping up with the brand-based impact of the news moving forward. Check them out here.
Empower Your Team with Tech
Dealerships today are managing nonstop customer conversations, rising expectations, and limited time for coaching and development.
The challenge isn’t effort. It’s consistency, visibility, and support across every interaction.
In our upcoming 30-minute session with Thuy Adomitis and Scott Traylor of Mia, we’ll break down the three essential roles AI should play inside a modern dealership.
Industry Check-Up: Automakers and the Broader Market
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Automaker scoreboard
February was uneven, but the brands with the right mix still found growth. Toyota Motor North America gained 3.2%, powered by pickups and cars, while managing a major SUV transition.
Toyota Motor North America: +3.2% (Toyota +3.3%, Lexus +2.5%)
Mix drivers: pickups +22%, cars +14%
Watch item: RAV4 -57% tied to redesign launch and tight supply during ramp-up
Honda was modestly positive, and Acura did the heavy lifting.
American Honda: +1.1% (Honda -0.5%, Acura +17%)
Mix note: car sales +9.4%, light trucks -2%
Hyundai and Kia posted record February results and continued to trade positions.
Hyundai: +5.9%
Kia: +4.3% (outsold Hyundai for the second straight month)
Powertrain reality check
The cleanest demand story right now is hybrids. Hyundai hybrid sales surged 79% and Kia hybrids rose 53%, a strong read on where shoppers go when fuel prices and monthly budgets feel tight. EV demand, meanwhile, stayed choppy and model-specific.
Hyundai EVs: +6% (Ioniq 5 and new Ioniq 9 helped)
Kia EVs: EV9 -40%, EV6 -53%
Incentives remain a major lever, especially as the market tests what EV demand looks like without federal credits.
Affordability and incentives
The broader market is still constrained by price and payment, even with decent pockets of demand. February SAAR was projected around 15.6M, up from January but below February 2025. Average transaction prices were expected near $46,303, and the average monthly payment rose to about $811. Longer terms continue to creep into the deal mix.
84-month loans: projected at 12.7% of financed sales
Avg incentive: about $3,293 per vehicle
Avg EV discount: about $10,356 (wide variation by model/region)
Inventory, used, and the wildcard
New inventory is generally available, but distribution still varies by brand and trim. Retail supplies were estimated around 2.19M units, or roughly a 65-day supply. Used is where momentum looks more consistently positive heading into spring.
Black Book wholesale (week ending Feb 28): +0.22% overall
Cars +0.08%, Trucks/SUVs +0.28%
Auction conversion: 66%
Cox Automotive also pointed to spring tailwinds from tax refunds averaging $3,804 (up 10%), helping demand and supporting wholesale trends. The big wildcard to keep on the radar is Iran-related oil and shipping disruption, which can move gas prices quickly and add ETA variability that hits sensitive trims first.
Dealer Conferences and Industry Events
March 31: NY Auto Forum
May 12: AutoIndustry.AI Summit
May 13-15: ASOTU CON 2026—get ready for the Year of the Human
🤖 AI: OpenAI has changed its deal with the U.S. military following backlash.
🛒 Retail: Shopify data shows the shift from Valentine's gifts to Spring Fever. People aren’t giving up on normal life over a few economic anxieties.
👽 Weird: Despite all the hate the final season received, Game of Thrones has a movie in the works.
1789 – In New York City, the first Congress of the United States meets, putting the U.S. Constitution into effect.
1902 – AAA is founded.
1966 – In an interview in the London Evening Standard, the Beatles' John Lennon declares that the band is "more popular than Jesus now."
Thanks for reading, Friend!
The news has some trouble in it right now, but we’ve seen what happens when dealers band together. So, let’s remember who we are, and how very much good we can do in much worse situations.
